Cisco has announced its plans to acquire Cloupia, a startup focused on data center management software, for $125 million. The deal will likely close during Cisco's second fiscal quarter, which ends in January.

Pete Barlas with Investor's Business Daily reported, "Cisco Systems (CSCO) shares inched up more than 1% in morning trading Thursday after the computer networking company said it intends to acquire Cloupia, a closely held software firm, for $125 million. Cloupia, based in Santa Clara, Calif., makes software that automates the installation and configuration of data center hardware. The software will be used to enhance Cisco's Nexus data center switches and the company's Unified Computing System line of servers. The move also will likely help Cisco become more competitive with server rivals IBM (IBM), Hewlett-Packard (HPQ) and Dell (DELL) in the systems management software market."

CRN's Chad Berndtson explained, "Cisco will pay about $125 million and what it described as 'retention-based incentives' in exchange for all shares of Cloupia, whose employees will join Cisco's data center group. Cisco plans to leverage Cloupia's software especially for its Unified Computing System (UCS) and Nexus switching products, to offer a 'single pane of glass' view into how networking, compute, storage, virtual machine and operating system resources are used."

ZDNet's Larry Dignan added, "The networking giant said that the acquisition will give it tools to automate data center and cloud infrastructure. Cisco's plan is to integrate Cloupia's software with its Unified Computing System (UCS) and Nexus switching gear. On Cisco's most recent earnings conference call, CEO John Chambers said that UCS had strong momentum and was starting to pull along networking sales too."

The Wall Street Journal's Ben Fox Rubin recalled, "Cisco launched an ambitious restructuring plan last year to focus on core product areas such as routing and switching gear that shuttle data between computers. Cisco has said it is benefiting from telecommunications and other companies' need for more robust networks to support mobile and cloud computing. Earlier this week, Cisco said its fiscal first-quarter profit jumped as the network-equipment maker continued to sell routers and switches profitably despite a slump in U.S federal spending and ongoing weakness in Europe."